For 2009, a first year depreciation deduction equal to 50% of the adjusted basis (cost less section 179 taken) is allowed. It should be noted that this bonus depreciation is not allowable if Section 179 has been taken on these equipment purchases. Thus, there is no double deduction.
This bonus depreciation is allowable for equipment and qualified leasehold improvement property (LIP). LIP is defined as improvements made to an interior portion of a nonresidential building made pursuant to a lease by the tenant or landlord to property that will be occupied exclusively by the tenant and that is placed in service more than three years after the date the property was first placed in service.